Wolfe Wave Pattern with Higher Oil, Higher U.S. Interest Rates

1895 12 32
Much of the first half gains in U.S. markets were contributed to historical low interest rates. Now that the Federal Reserve is stating they are trimming back QE 3, yields have reversed quickly. A matter of fact there has only been a few times over the past 20 years we have seen a faster percent increase in U.S. Treasuries. With higher yields we squash what we have gained in housing sector and with the homebuilders sector. Two sectors that were obviously hit the hardest in 2008-09. We also have higher oil             prices with the current turmoil in the Middle East. Although higher oil             prices could quickly turnover with U.S. markets heading lower. Higher oil             prices also temper positive consumer sentiment and retail sales.

Technically we are looking at a Wolfe Wave Pattern. Identified correctly, Wolfe waves can be used to accurately predict the scope (equilibrium price) of the underlying security. To identify Wolfe waves , they must have the following characteristics:

Waves 3-4 must stay within the channel created by 1-2
Wave 1-2 equals waves 3-4 (shows symmetry)
Wave 4 is within the channel created by waves 1-2
There is regular time between all waves
Wave 5 exceeds trendline created by waves 1 and 3 and is the entry point

The estimated price is a price along the trendline created by waves 1 and 4 (point 6).

Fibonacci measurements also help you plot forecasted hits on discovered ascending/descending trendlines . A 2-3 Fibonacci extension to 1.618/1.414 is usually the spot for the 5th wave. Also a measure from 2-1 with a 2.414 fib can also measure a 5th wave target.

Federal Reserve FOMC Calendar
September 17-18*
* Meeting associated with a Summary of Economic Projections and a press conference by the Chairman.

Federal Reserve Chairman Ben Bernanke will miss the annual Jackson Hole meeting this August.
Broke out
Wolfe Wave pattern works better with descending and expanding lines ... like here
+1 Reply
SPY smells like a bull trap, looks like a bull trap, and it is probably a bull trap. However, I'm not sure when that trap takes the bull by the hoof and throws him to the ground.

I'm studying a more sure bet at the moment and will probably make a play on TLT, U.S. long term bond ETF. It's possible SPY, which plays inverse to higher yields and stronger bond prices, is pricing in a strong bullish move in the bond market.

QuantitativeExhaustion QuantitativeExhaustion

Daily chart divergences
QuantitativeExhaustion QuantitativeExhaustion

Weekly gator on Fisher 34 with indications of divergence, although not strong. Probably a shallow and quick pump and dump.
QuantitativeExhaustion QuantitativeExhaustion

More details in the 1H chart.
Earnings Season is the Wild Card
Major banks and Tech Giants next three weeks

ooh that look nasty !
This chart is a must for the TradingView University. Such an important pattern to know. Your coverage of events isnt' shabby either. Sincerely, Beauty
EN English
EN English (UK)
EN English (IN)
DE Deutsch
FR Français
ES Español
IT Italiano
PL Polski
SV Svenska
TR Türkçe
RU Русский
PT Português
ID Bahasa Indonesia
MS Bahasa Melayu
TH ภาษาไทย
VI Tiếng Việt
JA 日本語
KO 한국어
ZH 简体中文
ZH 繁體中文
AR العربية
Home Stock Screener Forex Signal Finder Cryptocurrency Signal Finder Economic Calendar How It Works Chart Features House Rules Moderators Website & Broker Solutions Widgets Stock Charting Library Feature Request Blog & News FAQ Help & Wiki Twitter
Profile Profile Settings Account and Billing My Support Tickets Contact Support Ideas Published Followers Following Private Messages Chat Sign Out